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Transport, finance ministers to discuss 6% SST for domestic flights
Published on: Monday, March 04, 2024
By: FMT, Shahrul Shahabudin
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Transport, finance ministers to discuss 6% SST for domestic flights
Transport minister Loke Siew Fook says the finance ministry has the final say on maintaining the 6% SST rate for domestic flights.
SEPANG: Transport minister Loke Siew Fook will discuss maintaining the 6% sales and service tax (SST) rate for domestic flights with the finance minister.

“The increase in SST (for domestic flights) has already been initiated. (This matter) will be discussed this week in the Cabinet (with the finance minister),” Loke said at a press conference after launching AirAsia’s fixed fare flights for Hari Raya Aidilfitri today.

He said maintaining the SST rate for domestic flights at 6% depends on the finance ministry’s approval.

Raised from 6% to 8% with effect from March 1, the new SST rate will not apply to food and beverages, telecommunication services, and logistics, including the delivery of goods and parking services.

At the same press conference, AirAsia founder Tony Fernandes urged the government to consider maintaining the 6% rate as the airline industry is still recovering from the Covid-19 pandemic.

“Tourism is a big part of the economy as many international tourists come here to visit Langkawi and Penang,” Fernandes said.

Loke also expressed his hope that the new 30-day visa-free policy for Chinese and Indian visitors could be extended beyond just a year.

He said it has made Malaysia a key tourist destination, as seen from the increase in tourist arrivals from these two countries by more than 30%.

In February, tourism, arts and culture minister Tiong King Sing said the visa-free policy was a success, with a 35% increase in arrivals during December 2023 alone.

Loke also said airlines can start implementing a carbon levy after the Malaysian Aviation Commission (Mavcom) finalises its amendments to the Malaysian Aviation Consumer Protection Code 2016 by next month.

“It’s up to the airlines when they can start collecting the carbon levy (after Mavcom amends the code),” he said.

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